Why use it?
To connect purchasing decisions to expected sales, desired inventory, markdowns, and orders already placed—instead of buying from instinct alone.
Free interactive and printable resource
Open-to-Buy Planner
Connect sales, inventory targets, markdowns, commitments, and receipts so the next purchasing decision is grounded in a visible plan.
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This is a practical starting point for retail planning, not accounting or financial advice. Confirm valuation methods and reporting definitions with your finance team.
New to open-to-buy?
Begin with the decision—not the formula.
Open-to-buy, often shortened to OTB, helps answer a practical question: How much additional inventory can I commit to while still supporting the sales and inventory plan?
When should I use it?
Build an initial annual or seasonal plan, then revisit it monthly before placing meaningful orders or when sales, events, funding, or delivery timing changes.
What should I gather?
Your sales plan, beginning inventory, desired ending inventory, expected markdowns, and purchase orders that have been placed but not yet received.
What does the answer mean?
A positive result suggests possible room to order. A negative result signals that commitments or assumptions need review. Neither result replaces judgment.
How to complete your first OTB plan
- Choose cost or retail. Use the same dollar basis for every field. On a cost basis, planned sales means planned cost of goods sold—not retail revenue. On a retail basis, planned sales means expected retail revenue.
- Start with one manageable scope. Use the total store if your information is limited, or begin with one department or category you understand well.
- Enter one month at a time. Add the sales plan, desired ending inventory, markdowns, beginning inventory, and merchandise already on order.
- Review the calculated amount. Planned receipts show what the plan requires. Current OTB shows what remains after existing commitments.
- Test the result before ordering. Consider cash, storage, lead times, minimums, current stock, demand, mission fit, and operational capacity.
- Update it regularly. Replace assumptions as sales occur, inventory changes, and deliveries are received or delayed.
Step 1 · Choose one basis
Plan everything in comparable dollars.
Use cost dollars if your purchasing budgets and inventory valuation are managed at cost. Use retail dollars only if every input—including inventory and on-order—is consistently valued at retail.
Basic monthly formulaPlanned sales + planned ending inventory + planned markdowns − beginning inventory − on-order commitments = open to buyYou enter the five planning inputs. The tool calculates planned receipts and current open to buy automatically.
What each field means
The amount you expect to sell during the month. On a retail basis, enter revenue. On a cost basis, enter planned cost of goods sold—not retail revenue.
The inventory you want available at the end of the month to support the next period without carrying unnecessary stock.
The value expected to leave inventory through price reductions, clearance, damage, or another approved adjustment.
The value of usable inventory available at the start of the month. It normally matches the prior month’s ending inventory.
The total new inventory the plan requires during the month. The tool calculates this before considering orders already placed.
The value of open purchase orders or confirmed commitments expected for the month that have not yet been received.
The portion of planned receipts not yet committed. It is a planning limit to review, not a spending target.
The value actually received during the month. Enter it as the period progresses to compare activity with the original plan.
Unsure where to start? Load the worked example, follow one row from left to right, and watch how planned receipts and current OTB respond when you change a number.
Step 2 · Build the monthly plan
See what remains available to commit.
“Planned receipts” is the inventory the plan requires. “Open to buy” is what remains after subtracting merchandise already on order. Actual receipts are tracked separately for comparison.
| Month | Planned cost of salesExpected COGS—not revenue | Planned ending inventoryDesired month-end stock | Planned markdownsExpected reductions | Beginning inventoryStarting stock value | Planned receiptsCalculated need | On order—not receivedAlready committed | Current open to buyNot yet committed | Actual receipts to dateReceived this month | Context noteExplain unusual factors |
|---|---|---|---|---|---|---|---|---|---|
| July | $0 | $0 | |||||||
| August | $0 | $0 | |||||||
| September | $0 | $0 | |||||||
| October | $0 | $0 | |||||||
| November | $0 | $0 | |||||||
| December | $0 | $0 | |||||||
| January | $0 | $0 | |||||||
| February | $0 | $0 | |||||||
| March | $0 | $0 | |||||||
| April | $0 | $0 | |||||||
| May | $0 | $0 | |||||||
| June | $0 | $0 |
Beginning and ending inventory are point-in-time balances, so they should not be added together as annual totals. Review and update the plan at least monthly.
How to read one month
If the plan requires $20,000 in receipts and $12,000 is already on order, current OTB is $8,000. That means up to $8,000 remains uncommitted within the plan—not that $8,000 must be spent.
Step 3 · Review and act
Protect flexibility before placing the next order.
Open-to-buy is a planning guardrail—not an instruction to spend every available dollar. Consider demand, lead time, cash, storage, minimums, mission relevance, and inventory risk.
You may have room to place additional orders, and the amount still needs to be tested against demand, timing, cash, storage, and risk.
Pause and reconcile commitments, inventory, sales plans, and markdown assumptions before adding more inventory.
Your information remains in this browser tab and is not submitted or stored.
Use open-to-buy well
The plan becomes useful when it is updated—not when it is first completed.
Stay consistent
Do not mix cost and retail dollars. Use the same valuation basis for sales, inventory, markdowns, commitments, and receipts.
Reforecast honestly
Update sales, inventory, and delivery assumptions when demand, exhibitions, events, lead times, or funding change.
Preserve flexibility
Avoid committing the entire available amount too early. Retain room for emerging demand, local opportunities, and unexpected needs.
No obligation. No jargon.
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